Come with us as we travel back exactly one year into the past (we won't be here long; humour us). Nobody outside Apple and AT&T knows about the iPhone, and mock-ups of the fabled 'widescreen iPod' have been circulating on the web for months.

People have been murmuring too about a touchscreen iPod, and saying that a wireless iPod - with a direct link to the iTunes Store - would be kinda neat. Now imagine if Apple had released the iPod touch into this context.

The crowd would have gone wild, Steve Jobs would have been (re-)hailed as some sort of demi-god, and Mr Visa would have woken up to see an appreciable spike in his graph of worldwide spending.

Back to the present

Fast-forward to now, though, and the new iPod touch - for all its shiny, lovely deliciousness - is decidedly less astonishing.

The problem, you see, is the iPhone. Announced in January and shipping in the UK in November, it introduced all the features of the iPod touch and more.

Let's get this straight: the iPod touch requires you to slap down £199 (8GB) or £269 (16GB), but then that's it. The iPhone - itself 8GB - although it's only £70 more than the 8GB iPod touch, requires you to sign up for an 18-month contract that will add a minimum £630 to the total cost of ownership. So by that maths, the iPhone is not £70 more than the iPod touch, but at least £700 more expensive.

And yet the iPod touch isn't so much 'the best iPod there is', it's more an iPhone with some of the functionality ripped out. Spiritually, it is more iPhone than iPod - at least as far as the rest of the iPod line-up goes - and as such it makes reviewing it a tricky proposition.

If you review it as 'iPhone Lite', it's a poor thing indeed. Although it boasts Wi-Fi and - since you need some sort of interface to the web if you want to join public hotspots, enter passwords, etc. - Safari, you don't get Mail. Sure, you can access many mailboxes via webmail, but that's an ungainly solution.

You also miss out on Maps, Weather, Stocks, a camera, a dock, an external speaker, Bluetooth, Notes and - of course, we only include it here for completeness - any kind of cellular connectivity. Some of these omissions we can understand, but there's another that just seems plain mean, and does seem like Apple is deliberately trying to create an artificial segmentation between the iPod touch and the iPhone.

Although it's possible to edit Address Book entries synced to your touch, you can't edit or create calendar events as you can on an iPhone; we sincerely hope Apple decides to remedy this with a firmware update.

If we review it as an iPod, though, things look a little bit better. Certainly, the 3.5-inch screen is by far the best option for watching videos, and although, like all the iPods, the screen lacks punch and richness, especially in the blacks, it generally performs well.

It seems that reports of shimmering in dark areas only affected some early models; Apple has acknowledged the issue. Note that it's a different screen from the iPhone's, and markedly less accomplished.

And if you've never used an iPhone before, the multi-touch interface will come as a wonderful surprise. It provides a genuinely revolutionary interface to your music, enabling you to flick through album art via Cover Flow or ping through a list of artists, albums or other criteria with a fluidity that almost makes the interface seem alive.